What's Next in the Securities Case Against Ripple Over XRP

Monday is the deadline for an XRP holder to file a response to Ripple's motion to dismiss his suit against the company.

That motion largely sidestepped the plaintiff's argument that Ripple sold XRP as an unregistered security, instead contesting the case on procedural and evidentiary grounds.

While Ripple presented a strong defense, the case is likely nowhere near complete, and the company will remain at risk of further lawsuits, legal experts say.

Monday will bring the next chapter of a long-running and closely watched lawsuit against Ripple.

It simply argued that Sostack waited too long to file the complaint and that he did not adequately demonstrate that he bought XRP during the initial sale or from Ripple.

While Ripple's motion to dismiss touched on the question of XRP being a security, it did so as a footnote rather than an argument.

Paul Godfrey, a Florida-based attorney, said that Ripple made "Both a statement and a legal conclusion in its introduction," noting that the introduction to the filing stated flatly, "The crux of claims is the false assertion that XRP is not a currency, but rather a security."

Rettig said she thinks the plaintiff might either "Try to make a 'relation back' argument, which means they're going to try to 'relate back' to the first filed case alleging that Ripple violated securities laws." Ripple has been facing lawsuits alleging it sold XRP as an unregistered security since at least May 2018.

Palley noted that because some of the claims are based on secondary market transactions, there could be no privity, or legal relationship, between the plaintiff and Ripple with Sostack's actual purchase of XRP. Godfrey pointed to self-proclaimed bitcoin creator Craig Wright's recent legal fight with the estate of Ira Kleiman, noting that the magistrate judge presiding over that case cited the "Evidentiary trail" bitcoin transactions provide.

Ripple does not have this issue, given its XRP holdings and business.